Australian banks mandate biometrics, introduce digital IDs
Australian banks have joined forces to require biometric checks from customers, along with other restrictions designed to “combat fraud.”
The Scam-Safe Accord, as the initiative is called, is intended to ‘protect Australian consumers” by implementing “anti-scam measures,” said the Australian Banking Association and Consumer Owned Banking Association in a press release last week.
All customers opening new accounts will need to provide at least one biometric data point such as a facial recognition check or fingerprint. Another possibility is a behavioral check, which will monitor customers’ behavior when interacting with the banks’ online systems. For example, customers who copy and paste data into online forms when they usually key in the data might not be authenticated.
In addition, banks are pooling a $100 million investment in a “confirmation of payee system” which will make money transfers more restrictive to ensure “people can confirm they are transferring money to the person they intend to.”
“Banks have committed to introduce new and higher protections into their systems, meaning customers should expect more warnings and delays when paying someone new or increasing payment limits,” said the press release.
The system is expected to be rolled out within the next two years.
Other components of the Scam-Safe Accord include restrictions on transfers to cryptocurrency platforms. Banks also agree to share intelligence on “fraudulent” customers, transactions, and patterns. If one bank decides a customer is a scammer, that information will be shared with all other banks and the individual will likely be barred from obtaining a bank account.
The Commonwealth Bank of Australia (CBA), Australia’s largest bank, also announced last month it has partnered with ConnectID to roll out a digital identification system. ConnectID will be integrated with the CBA app and use customers’ facial biometric data to create a digital ID. Customers can then use that digital ID to authenticate themselves with online merchants and other businesses.
CBA’s decision to implement digital IDs comes as the government’s plan to do the same drags on due to objections over privacy concerns.
The Scam-Safe Accord is the latest in an ongoing crackdown on customers which has included further restrictions on cash, payments, and cryptocurrency, also in the name of “fraud protection.”
Earlier this year CBA notified customers in an email that starting September 30th it will begin limiting transfers to A$10,000 ($6,624) in a month, particularly to cryptocurrency exchanges, “to protect customers from scams.”
The email stated that Commonwealth would impose the monthly limit on transfers “to accounts and/or merchants which we reasonably believe may be owned or controlled by a cryptocurrency or digital asset exchange or being used to purchase cryptocurrency or digital assets.”
It would also apply to “using a particular payment product, type of transaction or dealing” and “where it is reasonably necessary to prevent systemic or individual criminal activity, including suspected or potential fraud or scams.”
“We're introducing new measures to help protect you from scams and fraud,” the bank wrote.
Recently revised terms and conditions also allow the bank to “suspend or close your account, cancel or suspend your card or other access method” to stop crypto payments. Crypto payments are currently held for 24 hours before being processed.
A CBA spokesperson said the purpose of the new restrictions is to “keep customers safe.”
The measures come as Commonwealth Bank continues to open branches where customers cannot withdraw cash, called “specialist centres.”
More than a billion notes in cash have disappeared from circulation in Australia over the past twelve months, reports Sky News.
Australian bank ANZ is also eliminating cash services at certain branches in an effort to support more digital transactions.
In a February report about a coming “digital wave,” ANZ noted that digital payments are becoming a growing preference over physical payments like cash.
“As consumers become accustomed to digital and even invisible payments – think transport apps automatically taking care of payment – they increasingly regard making physical payments as an inconvenience,” said ANZ Worldline Payment Solutions Chief Market Officer Anne McDonnell.
The bank also expressed enthusiasm for central bank digital currencies (CBDC), which are digital currencies issued and governed by a central bank. Unlike with cash, transactions performed with CBDC are not anonymous and have the potential to be monitored — and even controlled — by authorities.
